Q4 2014 report comm v4B - IDEX Biometrics · 2018-10-27 · 2014 (((((=

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IDEX%ASA%interim%report%for%the%fourth%quarter%and%preliminary%result%for%2014%%Highlights%in%this%report%Strategic%Partnerships%• IDEXApartner%Card%Tech%announced%that%it%is%ready%to%massAproduce%Card%Tech%Smart%Card%

IDEX%sensor%key%component%of%industry%first%ISO%standard%biometric%card%• Memorandum%of%understanding%with%Amkor%Technology%formalised%strategic%massAvolume%manufacturing%partnership%

Leverages%Amkor’s%world@class%high@precision%manufacturing%capabilities%and%strong%customer%base%%• Partnership%with%Flextronics%to%provide%IDEX’s%fingerprint%sensors%as%part%of%Open%Innovation%Platform%%

IDEX%first%fingerprint%sensor%provider%to%be%added%to%the%Open%Innovation%Platform%offering%• Partnership%with%Trustonic,%the%leading%provider%of%Trusted%Execution%Environments%(TEEs)%for%smart%devices%%

Will%integrate%IDEX's%sensors%and%software%with%Trustonic%TEE,%delivering%secure%on@device%biometric%authentication%• IDEX%and%World%Wide%Touch%Technology%(Holdings)%Limited%agreed%to%convert%order%for%swipe%sensors%to%touch%sensors%

Reflecting%strong%positive%market%adoption%of%touch%sensors%Business%Developments%• Acquired%superior%software%algorithm%and%key%patents%for%small%area%fingerprint%touch%sensors%

Enables%IDEX%to%deliver%significantly%enhanced%security%and%user%convenience%for%mass@market%sensor%solutions%• Strong%presence%at%the%Consumer%Electronics%Show%(CES)%in%Las%Vegas%%

Showcased%range%of%fingerprint%sensors%and%demonstrators,%while%WWTT%launched%FingerQ%biometric%security%system%%Other%highlights%in%2014%%Strategic%Partnerships%• Strategic%partnership%agreement%with%Cypress%Semiconductor%Corporation%

Targeting%volume%opportunities%in%multiple%markets:%smartphone,%tablets,%wearables%• Collaboration%with%CrucialTec%to%accelerate%and%sample%firstAgeneration%smallAarea%mobile%touch%sensor%

Responding%to%demand%shift%for%higher@value%touch%sensors%in%flagship%mobile%devices%following%launch%of%iPhone%5S%• Strategic%partnership%with%leading%touch%semiconductor%vendor%FocalTech%Systems%to%supply%swipe%fingerprint%sensors%

Focus%on%rapidly%growing%Chinese%market%for%cost@sensitive%mobile%devices,%including%smart%phones%• IDEX%entered%into%licence%agreement%with%BIOAkey%to%deliver%advanced%biometric%software%solutions%for%mobility%market%

Next%generation%of%secure%identification%solutions%and%algorithms%for%mass@market%consumer%devices%Business%Developments%• Funds%managed%by%global%asset%manager%Invesco%invested%NOK%300%million%in%IDEX%• Landmark%investment%accelerated%development%of%IDEX%as%a%global%leader%in%fingerprint%market%• IDEX%demonstrated%the%first%functional%glass%fingerprint%sensor%at%the%2014%Mobile%World%Congress%in%Spain%

Key%step%towards%integrating%sensor%in%cover%glass%of%mobile%devices%• Biometric%industry%veterans%joined%IDEX’s%staff%and%Strategy%Advisory%Council%

Significant%industry%knowhow%enabling%IDEX%to%accelerate%business%execution%Market%Developments%• Market%for%biometric%authentication%on%mobile%devices%validated%by%rapid%penetration%with%300A350%million%fingerprint%sensors%in%

handsets%in%2014.%Further%accelerated%by%Apple’s%successful%launch%of%mobile%payment%system%Apple%Pay%• Strong%interest%by%Payment%Network%players%such%as%MasterCard%for%biometric%authentication%%%Outlook%and%key%upcoming%milestones%%• IDEX%one%of%very%few%suppliers%with%relevant%IP%portfolio%for%capacitive%fingerprint%sensors%applications%in%mobile,%card%and%

internet%of%things%applications%%• Continuously%strengthening%patent%and%IP%position%with%significant%R&D%investment%• Resource%expansion%and%hiring%key%staff%to%accelerate%business%execution%• Continuing%to%develop%partnerships%providing%established%highAvolume%manufacturing%and%market%channels%to%exploit%the%

identified%market%opportunities%• On%track%for%developing%new%offAchip%fingerprint%touch%sensors%based%on%flexible%circuit%technology%to%meet%demand%for%

lower%cost%and%improved%biometric%performance%• Expecting%to%sample%offAchip%sensors%in%first%half%of%2015,%with%deployment%in%mass%production%in%second%half%• Expecting%to%sample%latest%sensor%in%glass%technology%in%2015%• Expect%to%capture%noticeable%share%of%the%multiAbillion%dollar%market%for%fingerprint%sensors%%

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The% fourth% quarter% of% 2014% saw% IDEX%make%progress% towards%monetising% the%investments% in% its% best% in% class% fingerCprint% matching% solutions% for% mobility,%smart% cards% and% Internet% of% Things%%mass%markets.%% Key% partners% such% as% Amkor%Technologies% and% Flextronics% were%added.% IDEX‘s% partner% Card% Tech% anCnounced% that% it% is% prepared% to% massCproduce% its% smart% card,% while% IDEX%shipped% initial% volumes% to%World%Wide%Touch%Technology%(Holdings)%Limited.%% In% the% beginning% of% January% 2015%IDEX% acquired% a% pivotal% algorithm% and%patents%for%touch%fingerprint%sensors.%%ISOAcompliant%card%with%IDEX%sensor%Italian% IDEXCpartner%Card%Tech%announCced% in% November% that% it% is% ready% to%massCproduce%its%Card%Tech%Smart%Card.%%% The% Smart% Card% was% demonstrated%for%the%first%time%at%the%trade%fair%Cartes%in%Paris%4C6%November%2014.%% The% Smart% Card% integrates% an%advanced%polymer%capacitive%biometric%sensor,% software% and% marketCleading%algorithm% from% IDEX,% which% can%operate% on% a% low% power% microCconCtroller% to% perform% the% realCtime% reconCstruction%of% the% image%and%comparison%with%the%user's%enrolled%fingerprint.%% The% thin% and% bendable% sensor% is%integrated% within% a% 0.76% mm% thick%Smart%Card,%compliant%to%ISO%7810IDC1,%the% international% standard% of% most%payment% cards.% IDEX's% polymer% fingerCprint% sensor% meets% the% ISO% bending%tolerance,% whereas% typical% silicon% dieCbased% sensors% are% brittle% and% more%likely%to%break.%%% An% firstCtier% electronics% manuCfacturing% partner% has% been% responsible%for%industrialisation%and%manufacturing.%%%Partnership%with%Amkor%Technologies%In% November% IDEX% entered% into% a%memorandum% of% understanding% with%Amkor% Technology% to% establish% a% straCtegic%mass%volume%manufacturing%partCnership% for% fingerprint% sensors,% forCmalising% significant% development% proCgress%over%six%months.%% Amkor% is% a% firstCtier% supply% chain%partner% for% mass% production% of% IDEX's%fingerprint% sensors.% The% agreement%enables% competitive% commercialisation%of% IDEX's% fingerprint% sensor% technology%by% leveraging% Amkor's%worldCclass% high%precision%manufacturing%capabilities.%% In%addition,%the%parties%will%leverage%

Amkor's% strong% established% customer%base% to% increase% finger% print% sensor%deployment% and% market% penetration%within%highCgrowth%markets.%% Amkor% is% listed% on% NASDAQ% and% is%one% of% the%world's% largest% providers% of%outsourced% advanced% semiconductor%assembly% and% test% services.% The%partnership% provides% IDEX% with% the%necessary% capabilities% and% capacity% to%deliver% fingerprint% sensors% in% mass%volume%to%firstCtier%mobile%OEMs.%% Amkor's% global% manufacturing%capabilities% enable% IDEX% to% service%multiple% customers% internationally.%Amkor% has% a% proven% track% record% in%highCvolume% manufacturing% of% finger%print% sensors% for% the% mobile% market,%achieving% excellent% production% yields%and% cost% effective% automated% proCcessing% through% innovative% packaging%solutions.%%Partnership%with%Flextronics%IDEX% and% Flextronics% entered% into% a%partnership% to% provide% IDEX’s% high%performance%fingerprint%sensors%as%part%of% Flextronics’s% Open% Innovation%Platform%offering.%% "We% are% pleased% to% become% the%first% fingerprint% sensor% provider% to% be%added%to%the%Open%Innovation%Platform%at% Flextronics,”% said% Dr.% Hemant% MarCdia,%CEO%of%IDEX.%% Flextronics%is%a%leading%supply%chain%solutions%company%that%delivers%design,%engineering,% manufacturing% and% logisCtics%services%to%a%range%of%industries.%%Trustonic%and%IDEX%become%partners%On% 5% January% 2015,% IDEX% announced%that% it% has% entered% into% a% partnership%with% Trustonic,% the% leading% provider% of%Trusted% Execution% Environments% (TEEs)%for% smart% devices.% IDEX% and% Trustonic%will%collaborate%to%integrate%IDEX's%next%generation% fingerprint% sensors% and%driver% software% with% Trustonic% TEE,%delivering%a%secure%onCdevice%biometric%authentication% experience% as% IDEX%commercialises% its% products% for% smart%devices%in%2015.%%WWTT%converts%order%to%touch%sensors%Following% a% successful% evaluation% of%IDEX’s% news% touchCbased% sensor%technology,% IDEX% and% World% Wide%Touch%Technology%(Holdings)%Limited%of%Hong% Kong% in% October% agreed% to%convert% a% previous% order% for% swipe%sensors% to% touch% sensors,% reflecting%

strong% positive% market% adoption% of%touch%sensors.%% These% sensors% will% be% incorporated%into% the% WWTT% Finger% Q% product% line%which% is% a% smart% biometric% security%system% consisting%of% a% range%of%mobile%peripherals% and% a% proprietary% secure%software%solution.%% Volumes%as%part%of% this%order%were%shipped% from% IDEX% in% the% fourth%quarter.%%%Acquired%key%algorithm%and%patents%On% 2% January% 2015% it% was% announced%that% IDEX%had%acquired%a%worldCleading%software%algorithm%and%key%patents%for%small%area%fingerprint%touch%sensors.%% This% enables% IDEX% to% deliver%significantly% enhanced% security% and%user% convenience% for% massCmarket%fingerprint% sensor% solutions% equivalent%to% Apple% Touch% ID.% Combined% with%IDEX's% recently% demonstrated% new% offCchip%touch%sensor%hardware,%ownership%of% this% algorithm% will% enable% IDEX% to%provide% the% lowest% cost% mobile% fingerCprint%product%in%the%marketplace.%% The% acquisition% includes% three%valuable% patent% families% for% fingerprint%ridge% matching,% with% four% granted%patents,% one% patent% pending% and%additional%patents%being%filed.%% “As% touch% sensors% continue% to% get%smaller,% more% advanced% algorithms%become% critical% in% order% to% deliver%reliable% fingerprint% matching% perforCmance.% This% acquisition% represents% a%significant% step% forward% in% our% product%development% roadmap% and% further%differentiates% IDEX's% technology% from%the%competition,”%said%Dr.%Mardia.%%Strong%presence%at%CES%in%Las%Vegas%IDEX% had% a% strong% presence% at% the%Consumer%Electronics%Show%(CES)%in%Las%Vegas% in% early% January% 2015.% IDEX%showcased% its% range% of% fingerprint%sensors% and% demonstrators,% including%the% new% generation% offCchip% touch%sensor%demonstrator.%%% In%addition,%IDEX’s%strategic%partner%WWTT% showcased% and% launched% its%new% range%of% FingerQ%products% at%CES,%with% IDEX% mass% production% ready%sensors% integrated.% The% FingerQ% proCduct% line% is% a% smart% biometric% security%system% consisting%of% a% range%of%mobile%peripherals% and% a% proprietary% secure%software%solution%%

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Outlook%IDEX's% strategy% is% to% leverage% its% core%technology%across% three%mass%markets:%mobile% devices,% ID% &% smart% cards% and%devices% being% part% of% the% Internet% of%Things.%% In% January% 2015% research% company%IHS% ranked% the% top% 10% technologies%transforming%the%world,%and%biometrics%and% sensors% were% listed% as% two% of%these.%%% This% aligns% with% IDEX’s% experience%that% the% market% opportunity% for%fingerprint% sensors% is% becoming% inCcreasingly% validated% across% all% three%target% mass% markets.% The% mobile%market% was% the% first% mover,% catalysed%by%Apple’s% introduction%of%a% fingerprint%sensor% in% the% iPhone% 5S.% Analysts%estimate% a% total% of% 300C350% million%mobile% handsets% had% integrated%fingerprint% sensors% in% 2014,% most% of%which% were% found% in% Apple% and%Samsung% phones.% Currently,% there% is% a%drive% by% mobile% OEMs% at% large% to%introduce% sensors% in% handsets,% a%development% which% has% been% accelCerated% by% the% introduction% of% mobile%payment%systems,%such%as%Apple%Pay.%% IDEX% has% very% strong% IP% and% techCnology% positioning% the% company% to%capture% a% share%of% this%market%with% its%product%roadmap,%including%both%swipe%and%touch%sensors.%% The% recent% acquisition% of% a% worldC

leading% software% algorithm% and% key%patents%for%small%area%fingerprint%touch%sensors% adds% a% key% competitive% adCvantage.% As% touch% sensors% get% smaller,%more% advanced% algorithms% become%critical% in% order% to% deliver% reliable%fingerprint%matching%performance.%% To% successfully% bring% products% to%market,% IDEX% has% entered% into% a% range%of% partnerships% with% firstCtier% comCpanies% along% the% value% chain.% These%partnerships% validate% IDEX’s% technoClogy,%and%equips%IDEX%with%a%robust%and%mass% scalable% delivery% model.% MoreCover,% these% partners% have% solid% cusCtomer% relationships% with% OEMs,%providing% a% channel% to% market% and%broad% distribution% of% IDEX’s% products.%IDEX%expects% to%continue%building% firstCtier% partnerships% along% the% value% chain%to% address% opportunities% in% all% three%mass%markets.%% IDEX% is% currently% sampling% its% offCchip% swipe% sensor,% and% the% convenCtional% silicon% sensor,% both% of% which%have% been% shipped% to% customers% in%small%volumes.%% %IDEX% is% on% target% for% sampling% its%new% offCchip% touch% sensor% in% the% first%half%of%2015.%This%sensor%is%expected%to%have% very% strong% biometric% perforCmance% and% a% groundCbreaking% cost% adCvantage% due% to% the% innovative% offCchip%architecture.% % Our% strong% partnerships%ensure% our% ability% to% deliver% this% new%

family% of% sensors% to% firstCtier% handset%manufacturers.% We% are% targeting% deCployment% from%this% in%mass%production%later%in%the%second%half%of%2015.%% The% next% route% on% IDEX’s% product%roadmap% is% to% implement% sensors% in%glass.% The% company% believes% that% this%revolutionary%sensor% implementation% is%unique% to% IDEX% and% will% provide% the%ultimate% solution% for% integration% of%fingerprint% recognition% in% mobile% deCvices.% Sampling% of% sensors% implementCed%in%glass%is%expected%in%2015%based%on%progress%achieved.%% The%partnership%with%Card%Tech%has%also% resulted% in% traction% in% the% card%market.% Card% Tech% introduced% an%industryCfirst% ISO% compliant% biometric%card,% and% the% market% response% has%been% very% positive.% IDEX% expects% that%that% the% interest% will% lead% to% sensors%deployed% in%card%pilot%programs%during%the% second% half% of% 2015,% for% volume%orders%in%2016.%% IDEX% will% continue% to% strengthen%the% team% with% highCcalibre% individuals%in% order% to% support% global% commerCcialisation%and%expected%rapid%growth.%% IDEX%is%solidly%funded%to%exploit%the%multibillionCdollar% market% opportunity%in% the% near% future,% leveraging% our%differentiated% road% map% underpinned%by%a%strong%patent%position%that% is%now%building%customer%traction.%

Fornebu,%23%February%2015%The%board%of%directors%of%IDEX%ASA%

!A!financial!narrative!and!interim!financial!statements!with!notes!are!enclosed.!%Investor%and%press%contacts:%%%Hemant%Mardia,%CEO,%%+44%7788%922%171,%%hm(at)idex.no%Henrik%Knudtzon,%CFO,%%+47%9302%2827,%%hk(at)idex.no%

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!

Interim!consolidated!financial!statements!as!at!31!December!2014!(Unaudited)!

%

Profit!and!loss!statements!

%

IDEX% earned% revenue% amounting% to%

NOK%1.5%million%in%2014,%of%which%NOK%

1.2%million% in% the% fourth%quarter,%comD

pared% to% NOK% 2.5% million% in% 2013%

(fourth% quarter:% NOK% 0.4% million).% In%

the% fourth% quarter% the% revenue% origiD

nated%from%deliveries%of%sensors,%while%

in% 2013% and% the% first% quarter% of% 2014,%

the% revenue% related% to% government%

support% of% research% and% development%

(R&D)% activities.% Such% revenue% has%

been% recognised% corresponding% to% the%

recognition% of% the% expenses% that% the%

grants%compensated.%The%gross%margin%

was%NOK%0.7%million% in%2014,%of%which%

NOK% 0.4% million% in% the% fourth% quarter%

(2013:%NOK%2.5%million,% fourth%quarter%

2013:%NOK%0.4%million).%

The% operating% expenses% amounted% to%

NOK% 125.6%million,% up% from% NOK% 66.5%

million% in% 2013.% Operating% expenses%%

in% the% fourth% quarter% amounted% to%

NOK% 41.7% million% which% was% signifiD

cantly% higher% than% the% average% of% the%

first% three% quarters% this% year,% and%

significantly% higher% than% the% correD

sponding%period%in%2013.%In%2013%there%

was%a%step%change% in%staff%and%activity%

level%during% the% second%half,% and% IDEX%

has% grown% its% staff% and% expanded% its%

operation% further% in% 2014.% IDEX% is%

ramping% up% across% all% key% functions%

including%product%development,%supply%

chain,% operations% and% sales,% to% secure%

commercialisation% of% its% products.% ExD

cluding% the% effects% of% shareDbased%

remuneration,% the% operating% expenses%

amounted% to% NOK% 115.4% million% in%

2014% (fourth% quarter:% NOK% 39.9%

million),%compared%to%NOK%45.9%million%

in%2013%(fourth%quarter%2013:%NOK%18.1%

million).%More% than% half% of% the% group’s%

operating%expenses%are%denominated%in%

US%dollars.%The%US%dollar%appreciated%21%

per%cent% from%30% June% to%31%December%

2014,%which% increase% caused%additional%

increase%in%costs%as%measured%in%NOK.%

The% payroll% expenses% have% increased%

significantly,% to% NOK% 56.2% million% in%

2014,% from% NOK% 38.0% million% in% 2013.%

The% payroll% expenses% are% impacted% by%

shareDbased% remuneration.% Firstly,% the%

notional% cost% of% the% incentive% subD

scription% rights% including% accrued%

employer’s% tax% varies% with% the% share%

price,%may%cause%a%net%reversal%of%cost.%

This% cost/reversal% does% not% have% any%

cash% effect.% Secondly,% the% actual,% payD

able% social% security% cost% on% exercised%

subscription% rights% occurs% only% on%

exercise,%and%is%funded%by%the%exercise.%

The% net% effect% of% the% shareDbased%

remuneration% therefore% varies% subD

stantially% between% quarters.% The%

actual,%underlying%payroll%costs%excludD

ing% the% effects% from% shareDbased%

remuneration% amounted% to% NOK% 46.0%

million% in% 2014,% of% which% NOK% 15.2%

million% in% the% fourth% quarter,% comD

pared% to% NOK% 17.4% million% in% 2013%

(fourth%quarter%2013:%NOK%7.8%million).%

The%payroll%costs% in%the%fourth%quarter%

2014% includes% accruals% for% organisaD

tional% changes%as%well%as%a%bonus%proD

gramme%implemented%in%the%quarter.%%

R&D% expenses% amounted% to%NOK% 51.1%

million% in% 2014% (fourth% quarter:% NOK%

17.5%million),%up%from%NOK%17.3%million%

in%2013% (fourth%quarter%2013:%NOK%7.4%

million).% The% increase% in% activity% level%

relates% to% product% development% and%

industrialisation,% ASIC% improvements,%

core% technology% and% new% sensor%

materials.% The% fourth% quarter% costs% in%

2014% as% well% as% in% 2013% is% net% of%

earned% Skattefunn% support% amounting%

to%NOK%1.6%million.%

Other% operating% costs% amounted% to%

NOK%18.3%million%in%2014%(fourth%quarD

ter:% NOK% 7.3% million),% up% from% NOK%

11.1% million% in% 2013% (fourth% quarter%

2013:% NOK% 3.0% million).% The% main%

reason% for% the% increase% is% expanded%

sales%and%marketing%activities.%%

IDEX% had% 42% employees% at% 31% DecemD

ber%2014,%up%from%39%at%30%September%

2014,% and% 23% at% the% end% of% 2013.% Six%

technical/scientific% individual%contractD

ors%works%full%time%or%regularly%as%part%

of% the% development% team,% and% addiD

tional%technical%experts%are%contracted%

as% and% when% needed.% Three% sales%

representatives%work%on%contract.%%

Depreciation% amounted% to% NOK% 2.3%

million% in% 2014% (fourth% quarter:% NOK%

0.7%million),%up%from%NOK%0.9%million%in%

2013% (fourth% quarter% 2013:% NOK% 0.6%

million).% IDEX% acquired% assets% and%

intellectual% property% rights% from% PicoD

Field%Technologies,% Inc.%on%23%SeptemD

ber%%2013.%Of%the%acquired%assets,%NOK%

15.3% million% are% depreciating% assets.%

On% 30% December% 2014,% IDEX% acquired%

patents% and% other% IP% from% Roger%

Bauchspies% in% an% amount% of%NOK% 28.3%

million.% The% stock% of% scientific% equipD

ment% and% engineering% tools% has% also%

been%expanded%by%investments%amountD

ing%to%NOK%3.9%million%in%2014,%and%in%the%

fourth% quarter% 2014,% IDEX% capitalised%

own%development%expenses%relating%to%

the% Cardinal% sensor% product,% in% an%

amount%of%NOK%0.8%million.%

EBIT% in% 2014% amounted% to% a% loss% of%

NOK% 127.3% million% (fourth% quarter:%

NOK% 42.0% million),% compared% to% NOK%

64.9% million% in% 2013% (fourth% quarter%

2013:%NOK%23.7%million).%The%increased%

staff% and% the% increase% in% R&D% activity%

explain%the%increased%loss.%%

Financial% items,% mainly% interest% income,%

amounted% to% a%net% income%amounting%

to% NOK% 5.8% million% in% 2014% (fourth%

quarter:%NOK%1.4%million),%compared%to%

NOK%0.1%million%net% financial%expenses%

in% 2013.% Exchange% gains% and% lossses%

relate% mainly% to% intraDgroup% payables%

and%receivables.%%

Because% IDEX% America% has% made% a%

profit,%there%was%a%tax%charge.%The%net%

result%for%the%group%in%2014%was%a%loss%

amounting% to% NOK% 122.0% million%

(fourth% quarter:% NOK% 40.0% million)%

compared%to%NOK%65.0%million% in%2013%

(fourth%quarter:%NOK%23.8%million).%%

Profit/loss%per%basic%weighted%average%

number% of% shares% amounted% to% a% loss%

of%NOK%0.30% in%2014.%Per% share% results%

are% not% directly% comparable% between%

quarters%or%years%because%the%number%

of%shares%has%increased%by%share%issues.

Page%2%of%8%

!

!

Balance!sheets!

%

IDEX% has% a% very% strong% balance% sheet%

because% of% the% private% placement% to%%

the% Invesco% funds% in% the% first% quarter%%

of% 2014.% At% 31% December% 2014,% IDEX%

held% a% cash% balance% amounting% to%NOK%

228.0%million,% and% the% company%has%no%

financial%debt.%

The% main% assets% held% in% the% balance%

sheet%are%the%intangible%assets%acquired%

from% PicoField% in% 2013% and% Roger%

Bauchspies% in% 2014,% inventoried% licenD

ces% acquired% from% BIODkey% InterD

national,%Inc.%in%2014,%and%cash%in%bank.%

Cash%is%the%major%item,%representing%76%

per%cent%of%the%total%assets.%

The% assets% and% intellectual% property%

rights% acquired% from% PicoField% in% 2013%

have% been% capitalised% in% accordance%

with% IFRS,% and% includes% goodwill% in% an%

amount% of% NOK% 8.3% million% and% deD

preciating% assets% in% an% original% acquiD

sition%amount%of%NOK%15.3%million.% %On%

30% December% 2014,% IDEX% acquired% patD

ents% and% other% IP% from% Roger% BauchD

spies%in%an%amount%of%NOK%28.3%million,%

which% assets% will% depreciate% over% the%

economic%life.%

IDEX’s% own% patents% and% other% intelD

lectual%property%rights%are%generally%not%

held% in% the%balance% sheet%because% they%

do% not% satisfy% the% criteria% for% capitaliD

sation.% Development% costs% have% in% the%

past%been%expensed%for%the%same%reason.%

in% the% fourth% quarter% 2014,% IDEX%

capitalised% own% development% expenses%

relating%to%the%Cardinal%sensor%product,%

in%an%amount%of%NOK%0.8%million.%%

On%31%December%2014,% the% total% assets%

amounted% to% NOK% 299.3% million,% of%

which%NOK%228.0%million%were%cash,%up%

from% total% assets% amounting% to% NOK%

76.0% million% and% cash% amounting% to%%

NOK%46.5%million%at%the%beginning%of%the%

year.% The% cash% position% is% further%

commented%upon%below.%

The%major% liabilities% are% various% operaD

tional% payables% to% suppliers% and% emD

ployees,% and% amounted% to% NOK% 54.8%

million% at% 31% December% 2014.% Of% this,%

NOK% 28.3% million% was% to% Roger% BauchD

spies.%Excluding%the%latter,%the%liabilities%

amounted% to% NOK% 26.5% million,% about%

the%same%as%the% liabilities%at%the%end%of%

2013.% There% are% usually% variations%

between% quarters% due% to% fluctuating%

payables% to% suppliers% and% accrued%

liabilities.%%

In% 2014,% new% equity% in% a% net% amount%%

of% NOK% 305.4%million% was% added,%most%

of% which% originated% from% a% private%

placement%of%shares% in%the%first%quarter%

to% funds% managed% by% Invesco% Asset%

Management% Limited.% The% remainder%

originated% from% exercised% subscription%

rights.%%

Equity% amounted% to% NOK% 244.5%million%

at% 31% December% 2014,% up% from% NOK%

49.9%million%at%the%end%of%2013.%%

In% connection% with% the% acquisition% of%

patents% and% other% IP% from% Roger%

Bauchspies% on% 30% December% 2014,% the%

board% resolved% a% private% placement% of%

500,000% new% shares% to% Roger% BauchD

spies.% The% shares% to%Mr%Bauchspies% are%

restricted% shares,% on% agreed% terms,%

issued% at% a% subscription% price% equalling%

par% value% per% share% of% NOK% 0.15.% The%

subscription% amount% was% paid% and% the%

shares%issued%in%January%2015.%

IDEX% has% adequate% equity% and% liquidity%

for%going%concern% for%significantly% longD

er% than% 12% months% from% the% date% of%

this%report.%

!

!

Cash!flow,!cash!position!

%

The% operational% cash% outflow% in% 2014%

was%NOK%105.1%million.% The%main% cash%

outflow% item% is% the% profit/loss,% partly%

offset% by% the% shareDbased% compenD

sation%and%working%capital.%%

Working% capital% released% NOK% 7.2%

million% in%2014%(2013:%NOK%18.5%million%

release).%NOK%24.1%million%was% released%

in% the% fourth% quarter,% mainly% the%

payable% to% Roger% Bauchspies,% of% which%

the% initial% shortDterm% part% was% paid% in%

January% 2015.% Except% this,% working%

capital% absorbed% cash% in% 2014% by%

additions% to% inventory,% increased% reD

ceivables% (earned% bank% interest)% and%

reduction%in%the%notional%employer’s%tax%

on% subscription% rights.% The% release% in%

2013% was%mainly% caused% by% accrual% of%

notional%employer’s%tax%on%subscription%

rights%and%accruals%related%to%suppliers.%

IDEX% ASA% relocated% to% a% larger% leaseD

hold% facility% in% the% first% quarter% of%%

2014.% The% move% entailed% investments%

in% equipment% and% furniture,% and% also%

an% increase% in% longDterm% deposit.% IDEX%

has% also% invested% in% equipment% and%

furniture% for% its% leasehold% facility% in%

Boston.%

NOK%304.6%million%new%equity%was%paid%

in%cash%in%2014.%Most%of%the%new%equity%

originated% from% the% private% placement%

to%the% Invesco%funds.% % In%January%funds%

managed% by% Invesco% Asset% ManageD

ment% Limited,% a% leading% global% invest%

or,%agreed%to%invest%NOK%300%million%in%

IDEX.% The% funds% also% received% 30%

million%warrants%at%an%exercise%price%of%

NOK% 7.50,% amounting% to% potentially%

NOK%225%million%additional%investment.%

The%warrants%are%open%to%be%exercised%

between% 29%January% 2015% and% 29% JanD

uary%2016.%

At%31%December%2014%the%cash%position%

amounted% to%NOK% 228.0%million,%while%

net% of% receivables% less% payables% and%

accruals%amounted%to%NOK%49.2%million%

payable,% leaving% a% balance% sheet%

solvency% of% NOK% 178.8% million.% % IDEX%

does%not%have%financial%debt.%%

% % Page%3%of%8%

!

!

!

IDEX!ASA!!

Condensed!consolidated!interim!financial!statements!with!notes!!

31!December!2014!(Unaudited)!

%

%

%

%

%

The%notes%are%an%integral%part%of%this%condensed%interim%financial%report.%

% %

Interim(consolidated(statements(of(comprehensive(income

1(October631(December

1"October*31"December

1(January631(December

Amounts"in"NOK"1,000 2014 2013 2014Operating(incomeSales"and"services"income 1(229((((((((((((((((((( """""""""""""""""""""""" 1(423(((((((((((((((((((Other"operating"revenue (((((((((((((((((((((((( 405"""""""""""""""""""""" 91((((((((((((((((((((((((Total(revenue 1(229((((((((((((((((((( 405(((((((((((((((((((((( 1(514(((((((((((((((((((

Cost"of"goods"sold 852(((((((((((((((((((((( """""""""""""""""""""""" 852((((((((((((((((((((((Gross(margin 377(((((((((((((((((((((( 405(((((((((((((((((((((( 662((((((((((((((((((((((

Operating(expensesPayroll"expenses 16(859(((((((((((((((( 13"136"""""""""""""""" 56(194((((((((((((((((Research"and"development"expenses 17(543(((((((((((((((( 7"410""""""""""""""""""" 51(068((((((((((((((((Other"operating"expenses 7(262((((((((((((((((((( 2"974""""""""""""""""""" 18(343((((((((((((((((Total(operating(expenses 41(664(((((((((((((((( 23(520(((((((((((((((( 125(605((((((((((((((

Profit((loss)(before(interest,(tax,(depreciation(and(amortization((EBITDA) (41(287)((((((((((((((( (23(115)((((((((((((((( (124(943)(((((((((((((Depreciation 723(((((((((((((((((((((( 605"""""""""""""""""""""" 2(307(((((((((((((((((((Profit(before(interest(and(tax((EBIT) (42(011)((((((((((((((( (23(720)((((((((((((((( (127(251)(((((((((((((

Financial(income(and(expensesInterest"income 1(138((((((((((((((((((( 164"""""""""""""""""""""" 5(667(((((((((((((((((((Other"financial"income 1(527((((((((((((((((((( 16"""""""""""""""""""""""" 2(096(((((((((((((((((((Interest"expenses (1)((((((((((((((((((((((((( (5)""""""""""""""""""""""""" (4)(((((((((((((((((((((((((Other"financial"expenses (1(250)((((((((((((((((( (263)""""""""""""""""""""" (1(932)(((((((((((((((((Net(financial(items 1(414((((((((((((((((((( (88)((((((((((((((((((((((( 5(827(((((((((((((((((((

Net(result(before(tax (40(597)((((((((((((((( (23(808)((((((((((((((( (121(424)(((((((((((((Income"tax"expense"(credit) 563(((((((((((((((((((((( 563((((((((((((((((((((((Net(profit((loss)(for(the(period( (40(034)((((((((((((((( (23(808)((((((((((((((( (121(987)(((((((((((((Profit'(loss)'per'share'0'basic'and'diluted NOK$(0.10) NOK'(0.07) NOK$(0.30)

Net(profit((loss)(for(the(period( (40(034)((((((((((((((( (23(808)((((((((((((((( (121(987)(((((((((((((Other"comprehensive"income (1(213)((((((((((((((((( """""""""""""""""""""""" (1(407)(((((((((((((((((Total(comprehensive(income(for(the(period,(net(of(tax (41(247)((((((((((((((( (23(808)((((((((((((((( (123(394)(((((((((((((

1"January*31"December"

2013

7""""""""""""""""""""""""""2"519"""""""""""""""""""2(526(((((((((((((((((((

""""""""""""""""""""""""2(526(((((((((((((((((((

38"029""""""""""""""""17"340""""""""""""""""11"146""""""""""""""""66(515((((((((((((((((

(63(989)(((((((((((((((929""""""""""""""""""""""

(64(918)(((((((((((((((

391""""""""""""""""""""""47""""""""""""""""""""""""(6)"""""""""""""""""""""""""

(519)"""""""""""""""""""""(87)(((((((((((((((((((((((

(65(005)(((((((((((((((

(65(005)(((((((((((((((NOK'(0.20)

(65(005)(((((((((((((((""""""""""""""""""""""""

(65(005)(((((((((((((((

% % Page%4%of%8%

%

%

%

%

The%notes%are%an%integral%part%of%this%condensed%interim%financial%report.%

% %

Interim(consolidated(balance(sheets( 31(DecemberAmounts(in(NOK(1,000 2014ASSETSLong=term(assetsGoodwill 8(260(((((((((((((((((((((((((((((((((((Other(intangible(assets 42(805(((((((((((((((((((((((((((((((((Machinery(and(office(equipment 5(588(((((((((((((((((((((((((((((((((((LongAterm(receivables 1(143(((((((((((((((((((((((((((((((((((Total(long=term(assets 57(796(((((((((((((((((((((((((((((((((

Current(assetsInventory(and(receivablesInventory 7(944(((((((((((((((((((((((((((((((((((Accounts(receivable 1(070(((((((((((((((((((((((((((((((((((Other(receivables 2(498(((((((((((((((((((((((((((((((((((Prepaid(expenses 2(044(((((((((((((((((((((((((((((((((((Total(inventory(and(receivables 13(556(((((((((((((((((((((((((((((((((

Cash(and(bank(depositsCash(and(bank(deposits 227(961((((((((((((((((((((((((((((((Total(cash(and(bank(deposits 227(961((((((((((((((((((((((((((((((

Total(current(assets 241(517((((((((((((((((((((((((((((((

TOTAL(ASSETS 299(313((((((((((((((((((((((((((((((

EQUITY(AND(LIABILITIESEquityPaid=in=capitalShare(capital( 61(948(((((((((((((((((((((((((((((((((Share(premium( 463(766((((((((((((((((((((((((((((((Other(paidAin(capital 32(787(((((((((((((((((((((((((((((((((Total(paid=in=capital 558(501((((((((((((((((((((((((((((((Other(equity (314(030)(((((((((((((((((((((((((((((Total(equity 244(471((((((((((((((((((((((((((((((

LiabilitiesLong=term(liabilitiesOther(longAterm(liabilities 10(079(((((((((((((((((((((((((((((((((Total(long=term(liabilities 10(079(((((((((((((((((((((((((((((((((Short=term(liabilitiesPaidAin,(not(registered(capital(Accounts(payable 8(997(((((((((((((((((((((((((((((((((((Public(duties(payable 2(207(((((((((((((((((((((((((((((((((((Notional(employer's(tax(on(share(incentives 2(231(((((((((((((((((((((((((((((((((((Other(shortAterm(liabilities 31(328(((((((((((((((((((((((((((((((((Total(short(term(liabilities 44(763(((((((((((((((((((((((((((((((((

Total(liabilities 54(842(((((((((((((((((((((((((((((((((

TOTAL(EQUITY(AND(LIABILITIES 299(313((((((((((((((((((((((((((((((

31(December(2013

8(260(((((((((((((((((((((((((((((((((((14(937(((((((((((((((((((((((((((((((((1(178(((((((((((((((((((((((((((((((((((446((((((((((((((((((((((((((((((((((((((

24(821(((((((((((((((((((((((((((((((((

3(445(((((((((((((((((((((((((((((((((((1(303(((((((((((((((((((((((((((((((((((4(748(((((((((((((((((((((((((((((((((((

46(475(((((((((((((((((((((((((((((((((46(475(((((((((((((((((((((((((((((((((

51(223(((((((((((((((((((((((((((((((((

76(044(((((((((((((((((((((((((((((((((

51(706(((((((((((((((((((((((((((((((((168(631(((((((((((((((((((((((((((((((20(183(((((((((((((((((((((((((((((((((

240(520(((((((((((((((((((((((((((((((190(636)(((((((((((((((((((((((((((((49(884(((((((((((((((((((((((((((((((((

=(((((((((((((((((((((((((((((((((((((((

4(245(((((((((((((((((((((((((((((((((((2(123(((((((((((((((((((((((((((((((((((9(711(((((((((((((((((((((((((((((((((((10(081(((((((((((((((((((((((((((((((((26(160(((((((((((((((((((((((((((((((((

26(160(((((((((((((((((((((((((((((((((

76(044(((((((((((((((((((((((((((((((((

% % Page%5%of%8%

%

%

%

%

%

%

%

%

%

%

%

The%notes%are%an%integral%part%of%this%condensed%interim%financial%report.%

% %

Interim(consolidated(statements(of(changes(in(equity Share Share Other

Retained,earnings,

(uncovered TotalAmounts,in,NOK,1,000 capital premium paid=in,capital loss) equityBalance(1(January(2014 51(706((((((((((((((((( 168(631((((((((((((((( 20(183((((((((((((((((( (190(636)((((((((((((( 49(884(((((((((((((((((Share(issues 10(242((((((((((((((((( 295(135((((((((((((((( 305(377(((((((((((((((ShareEbased(compensation 12(604((((((((((((((((( 12(604(((((((((((((((((Total(comprehensive(income(for(the(period (123(394)((((((((((((( (123(394)(((((((((((((Balance(31(December(2014 61(948((((((((((((((((( 463(766((((((((((((((( 32(787((((((((((((((((( (314(030)((((((((((((( 244(471(((((((((((((((

Balance(1(January(2013 46,422,,,,,,,,,,,,,,,,, 86,292,,,,,,,,,,,,,,,,, 11,235,,,,,,,,,,,,,,,,, (125,631),,,,,,,,,,,,, 18,318,,,,,,,,,,,,,,,,,Share,issues 5,284,,,,,,,,,,,,,,,,,,, 82,339,,,,,,,,,,,,,,,,, 87,623,,,,,,,,,,,,,,,,,Share=based,compensation 8,948,,,,,,,,,,,,,,,,,,, 8,948,,,,,,,,,,,,,,,,,,,Total,comprehensive,income,for,the,period (65,005),,,,,,,,,,,,,,,, (65,005),,,,,,,,,,,,,,,,Balance(31(December(2013 51(706((((((((((((((((( 168(631((((((((((((((( 20(183((((((((((((((((( (190(636)((((((((((((( 49(884(((((((((((((((((

Interim(consolidated(cash(flow(statements

1(October531(December

1"October*31"December

1(January531(December

Amounts"in"NOK"1,000 2014 2013 2014Cash(Flows(from(operating(activitiesProfit"(loss)"before"interest"and"taxes (42(011)(((((((((((((((( (23"720)"""""""""""""""" (127(251)((((((((((((((Share*based"remuneration"(equity"part) 2(717(((((((((((((((((((( 3"374"""""""""""""""""""" 12(604(((((((((((((((((Depreciation 723((((((((((((((((((((((( 605""""""""""""""""""""""" 2(307((((((((((((((((((((Interest"paid (1)(((((((((((((((((((((((((( (5)"""""""""""""""""""""""""" (4)((((((((((((((((((((((((((Change"in"working"capital"and"other"items 24(127((((((((((((((((( 3"664"""""""""""""""""""" 7(195((((((((((((((((((((Net(cash(flow(from(operational(activities (14(445)(((((((((((((((( (16(082)(((((((((((((((( (105(149)((((((((((((((

Cash(flows(from(investing(activitiesPurchases"of"assets (29(409)(((((((((((((((( (1"014)"""""""""""""""""" (33(002)((((((((((((((((Capitalised"development"costs (788)((((((((((((((((((((( """"""""""""""""""""""""" (788)(((((((((((((((((((((Change"in"long*term"receivables (18)(((((((((((((((((((((((( (7)"""""""""""""""""""""""""" (697)(((((((((((((((((((((Interest"received 1(138(((((((((((((((((((( 164""""""""""""""""""""""" 5(667((((((((((((((((((((Net(cash(provided(by(investing(activities (29(077)(((((((((((((((( (857)((((((((((((((((((((( (28(820)((((((((((((((((

Cash(flows(from(financing(activitiesShare"issues"net"of"expenses (17)(((((((((((((((((((((((( 2"931"""""""""""""""""""" 305(377(((((((((((((((

1"January*31"December"

2013

(64(918)((((((((((((((((8(948((((((((((((((((((((929((((((((((((((((((((((((6)((((((((((((((((((((((((((

18(465((((((((((((((((((36(582)((((((((((((((((

(24(676)(((((((((((((((((((((((((((((((((((((((((

(114)(((((((((((((((((((((391(((((((((((((((((((((((

(24(399)((((((((((((((((

87(623(((((((((((((((((Change"in"long*term"payable 10(079((((((((((((((((( 10(079(((((((((((((((((Net(cash(provided(by(financing(activities 10(062((((((((((((((((( 2(931(((((((((((((((((((( 315(456(((((((((((((((

Net(change(in(cash(and(cash(equivalents (33(460)(((((((((((((((( (14"008)"""""""""""""""" 181(486(((((((((((((((Opening"cash"balance 261(421((((((((((((((( 60"483""""""""""""""""" 46(475(((((((((((((((((Closing(cash(balance 227(961((((((((((((((( 46(475((((((((((((((((( 227(961(((((((((((((((

87(623(((((((((((((((((

26"642"""""""""""""""""19(833(((((((((((((((((46(475(((((((((((((((((

% % Page%6%of%8%

!

!

Notes!to!the!condensed!consolidated!interim!financial!statements!!

31!December!2014!(Unaudited)!

!

1!!IDEX!ASA!and!the!IDEX!group!

%IDEX%ASA% is% a% public% limited% liability% comD

pany% incorporated% and% domiciled% in% NorD

way.% The% address% of% the% registered% office,%

which% is% also% the% head% office,% is% Martin%

Linges%vei%25%at%NOD1364%%Fornebu,%Norway.%

IDEX% ASA% shares% have% been% listed% at% the%

Oslo%Axess%market% place% of%Oslo% Børs% since%

12% March% 2010.% The% objective% of% the%

company% as% stated% in% the% articles% of% assoD

ciation%is%to%deliver%computerDbased%identifiD

cation%systems%and%other%related%activities.%

IDEX% ASA% holds% a% subsidiary% group% in% the%%

USA:% IDEX% Holding% Inc.% which% holds% IDEX%

America% Inc.% IDEX% America% is% the% operating%%

entity% in% the% USA,% providing% development%

services% as% well% as% sales% and% marketing%

services% to% IDEX% ASA.% Operations% in% IDEX%

America% commenced% in% September% 2013%

when% IDEX%acquired%assets%and% % intellectual%

property% rights% and% employed% staff% from%

PicoField% Technologies,% Inc.% IDEX% ASA% also%

holds% IDEX% Biometrics% UK% Ltd.,% which%

company%provides%various%management%and%

administrative%services%to%IDEX%ASA.%

2!!Basis!of!preparation,!accounting!policies,!resolution.!Risks!

%This% condensed% consolidated% interim% finanD

cial% report% for% 2014% has% been% prepared% in%

accordance% with% IAS% 34% Interim% financial%

reporting.% This% condensed% consolidated%

interim% financial% report% should% be% read% in%

conjunction% with% the% annual% financial%

statements% for%2013.% The% IFRS% accounting%

policies% applied% in% this% condensed% interim%

financial% report% are% consistent% with% those%

applied% and% described% in% the% annual%

financial%statements%for%2013.%

The% going% concern% assumption% has% been%

applied% when% preparing% this% interim% finanD

cial%report.%IDEX%does%not%earn%recurring%reD

venue.%The%company%does%not%have%financial%

debt,% and% IDEX% has% adequate% liquidity% and%

equity% under% current% planning% assumptions%

for% a% period% significantly% longer% than% 12%

months%from%the%date%of%this%report.%%

This% interim% financial% report% has% not% been%

subject% to% audit.% The% report% was% approved%

by% the% board% of% directors% on% 23%%February%

2015.%

It% is% the% duty% of% the% board% of% directors% to%

duly%present% the%principal% risks%of% IDEX%and%

its% business.% IDEX% does% not% have% any%

significant%assets%or%liabilities%with%risk.%IDEX%

does% not% hold% financial% instruments% or%

noteworthy% financial% assets% or% liabilities,%

and% has% limited% financial% risks% related% to%

currency%and%interest%rates.%%

The% company’s% major% longDterm% risk% is% its%

business% risk,% meaning% its% ability% to% earn%

revenue.% This% risk% is% difficult% to% assess,%

because% IDEX% hitherto% has% earned% inD

significant%revenue%from%its%technology.%The%

company’s% ability% to% earn% revenue%depends%

on% firstly,% its% ability% to% develop% and%market%

successful% components% which% its% partners%

will% embed% in% their% products% and% systems,%

and% secondly,% the% company’s% ability% to%

legally% protect% its% intellectual% property%

rights,% and% finally,% to% maintain% a% comD

petitive% advantage.% IDEX% considers% that% its%

fingerprint%sensor%technology%has%one%of%the%

best%biometric%performanDces,% and% that% the%

SmartFinger% sensor% product% range% offers%

unique%properties.%

The% company%does%not%have% financial% debt,%

and% IDEX%has% adequate% liquidity% and% equity%

under% current% planning% assumptions% for% a%

period% significantly% longer% than% 12% months%

from%the%date%of%this%report.%

%

3!!LongLterm!assets!!

!

!

IDEX% acquired% assets% and% intellectual% proD

perty% rights% from% PicoField% Technologies,%

Inc.,%and%IDEX%America%employed%three%staff%

members% from% PicoField% on% 23%%SeptemD

ber%%2013.% The% business% combination% was%

capitalised%in%accordance%with%IFRS.%%

Amounts(in(NOK(1,000 Goodwill

Otherintangible(

assets

Machinery(and(office(

equipmentLongAterm(receivables

TotallongAterm(

assets

Balance(1(January(2014 8(260((((((((((((((( 14(937((((((((((((( 1(178((((((((((((((( 446(((((((((((((((((( 24(821(((((((((((((Additions (((((((((((((((((((( 29(078((((((((((((( 4(824((((((((((((((( 697(((((((((((((((((( 34(599(((((((((((((Disposals(at(cost (((((((((((((((((((( (((((((((((((((((((( (((((((((((((((((((( (((((((((((((((((((( ((((((((((((((((((((Depreciation(and(impairment(losses (((((((((((((((((((( (1(210)((((((((((((( ( (1(098)((((((((((((( ( (((((((((((((((((((( (2(308)((((((((((((( (Effects(of(changes(in(foreign(currency (((((((((((((((((((( (((((((((((((((((((( 684(((((((((((((((((( (((((((((((((((((((( 684((((((((((((((((((Balance(31(December(2014 8(260((((((((((((((( 42(805((((((((((((( 5(588((((((((((((((( 1(143((((((((((((((( 57(796(((((((((((((

Balance(1(January(2013 0 0 626(((((((((((((((((( 332(((((((((((((((((( 958((((((((((((((((((Additions 8)260))))))))))))))) 15)340))))))))))))) 1)076))))))))))))))) 114)))))))))))))))))) 24(790(((((((((((((Disposals)at)cost )) ((((((((((((((((((((Depreciation)and)other)movements (403)))))))))))))))))) (524)))))))))))))))))) (927)(((((((((((((((((Balance(31(December(2013 8(260((((((((((((((( 14(937((((((((((((( 1(178((((((((((((((( 446(((((((((((((((((( 24(821(((((((((((((

% % Page%7%of%8%

Under% IFRS% goodwill% is% not% amortised% but%

impairment% tested%at%each%year%end.% IDEX’s%

own%patents%and%other%intellectual%property%

rights% created% by% IDEX% are% not% held% in% the%

balance% sheet% because% they% do% not% satisfy%

the% criteria% for% capitalisation.% Development%

costs% have% in% the% past% been% expensed% for%

the% same% reason.% in% the% fourth% quarter%

2014,% IDEX% capitalised% own% development%

expenses% relating% to% the% Cardinal% sensor%

product,%in%an%amount%of%NOK%0.8%million.%

%

!

4!!Shares,!warrants!and!subscription!rights!

!

%In% connection% with% acquisition% of% patents%

and% other% IP% from% Roger% Bauchspies% on%

30%%December% 2014,% the% board% resolved% a%

private%placement%of%500,000%new%shares%to%

Roger%Bauchspies.%The%shares%are%restricted%

on% agreed% terms,% and% are% issued% at% a% subD

scription%price%equalling%par%value%per%share%

of% NOK% 0.15.% The% subscription% amount%was%

paid%and% the% shares%were% issued% in% January%

2015.%

IDEX% has% granted% incentive% subscription%

rights% (SRs)% to% employees,% individual% conD

tractors%and%board%members.%The%grants% to%

board%members%(in%2010)%were%made%by%the%

general% meeting% in% lieu% of% cash% board% reD

muneration.% Unless% specifically% resolved%

otherwise,% 25% per% cent% of% each% grant% of%

subscription%rights%vest%12%months%following%

the%date%of%the%grant,%and%expire%on%the%fifth%

anniversary% following% the% general% meeting%

that% resolved% the% programme.% Unvested%

subscription% rights% terminate% on% the% holdD

er’s% last% day% of% employment.% Vested%

subscription% rights% may% be% exercised% up% to%

90% days% after% the% holder’s% last% day% of%

employment.% The% weighted% average% exerD

cise% price% of% outstanding% incentive% SRs% on%

31%December%2014%was%NOK%2.88%per%share.

%

%

5!!Payroll!expenses!

!

!

The% fair% value% at% grant% date% of% subscription%

rights% granted% to% employees% and% board%

members% are% expensed% over% the% vesting%

period%of%each%tranche.%The%fair%value%of%the%

subscription% rights% is% determined% using% a%

Black%&%Scholes%option%pricing%model.%%

Number'of'financial'instrumentsSubscription'

rights Warrants SharesBalance'1'January'2014 28'186'345''''''' 0''''''''''''''''''''''' 344'707'732''''2'and'20'January'2014:'Grant'of'subscription'rights 570'000''''''''''''29'January'2014:'Private'placement'to'funds'managed'by'Invesco 30'000'000''''''' 60'000'000'''''''24'February'2014:'Exercise'of'subscription'rights (5'275'983)''''''' 5'275'983'''''''''20'March'2014:'Private'placement'to'Cenkos'Securities 2'400'000'''''''''1'April'2014:'Grant'of'subscription'rights 1'890'000'''''''''8'May'2014:'Issue'of'board'remuneration'shares 63'897''''''''''''' '17'June'2014:'Grant'of'subscription'rights 580'000''''''''''''15'September'2014:'Grant'of'subscription'rights 2'200'000'''''''''2'October'2014:'Exercise'of'subscription'rights (541'250)''''''''''' 541'250''''''''''''14'November'2014:'Grant'of'subscription'rights 460'000''''''''''''Resolved'but'not'yet'issued'shares 500'000''''''''''''Forfeited'subscription'rights'during'2014 (1'608'750)'''''''Balance'31'December'2014 26'460'362''''''' 30'000'000''''''' 413'488'862''''

Balance'1'January'2013 17'745'286''''''' 0''''''''''''''''''''''' 309'479'430''''16#May#2013:#Private#placement 18#771#250#######16#May#2013:#Share#issue#(board#remuneration) 353#157############1#September#2013:#Private#placement#to#WWTT 7#365#060#########23#September#2013:#Private#placement#to#WWTT 4#680#000#########Several#dates:#Grants#of#incentive#subscription#rights 14#400#000#######Several#dates:#Exercises#of#incentive#subscription#rights (4#058#835)######## 4#058#835#########Several#dates:#Forfeited#and#expired#incentive#subscription#rights (2#310#106)########Balance'31'December'2013 25'776'345''''''' 0''''''''''''''''''''''' 344'707'732''''

1"October*31"December

1"October*31"December

1"January*31"December

1"January*31"December

Amounts"in"NOK"1,000 2014 2013 2014 2013Salary,"payroll"tax,"benefits"and"other"personnel"expenses 15"600""""""""""""" " 7"758"""""""""""""""" 46"461""""""""""""" " 17"427""""""""""""""Capitalised"cost"of"development"work (440)"""""""""""""""""" *"""""""""""""""""""" (440)"""""""""""""""""" *""""""""""""""""""""Payroll"tax"on"exercised"subscription"rights 145""""""""""""""""""" 1"650"""""""""""""""" 5"049"""""""""""""""" 1"975""""""""""""""""Share*based"remuneration,"notional"salary"expense 2"717"""""""""""""""" 3"374"""""""""""""""" 12"604""""""""""""" " 8"948""""""""""""""""Share*based"remuneration,"accrual"(reversal)"of"employer's"tax (1"163)""""""""""""""" 354""""""""""""""""""" (7"480)""""""""""""""" 9"679""""""""""""""""Payroll"expense 16"859""""""""""""" " 13"136""""""""""""" " 56"194""""""""""""" " 38"029""""""""""""""

% % Page%8%of%8%

Employer’s% social% security% tax% related% to%

shareDbased% remuneration% is% calculated% on%

the%balance%sheet%date%based%on%the%earned%

intrinsic% value% of% the% subscription% rights,%

and% the%adjustment% to% the%accrued%amount%

is%charged%or%credited%to%cost.%

When%subscription% rights%are%exercised,% the%

accrued% payroll% tax% is% reversed% and% the%

actual%payroll%cost%is%expensed.%

%

6!!Tax!expense!

%

The%tax%expense%relates%to%estimated%tax%on%profit%in%IDEX%America.%

%

%

7!!Profit!(loss)!per!share!

!

%

1!January!–!!

31!December!

2014%

1%January%–%%

31%December%

2013%

Profit%(loss)%attributable%to%the%shareholders%(NOK%1%000)! (121!987)% (65%005)!

Weighted%average%basic%number%of%shares! 406!478!449% 326%183%037!

Weighted%average%diluted%number%of%shares% 419!718!850% 339%923%615%

Profit%(loss)%per%share,%basic%and%diluted% NOK!(0.30)% NOK%(0.20)%

%When%the%period%result%is%a%loss,%the%loss%per%

diluted%number%of% shares% is%not% reduced%by%

the% higher% diluted% number% of% shares% but%

equals% the% result% per% basic% number% of%

shares.%%

The% diluted% number% of% shares% has% been%

calculated% by% the% treasury% stock%method.% If%

the% exercise% price% of% subscription% rights% or%%

warrants%exceeds%the%average%share%price%in%

the% period,% the% subscription% rights% or% warD

rants%are%not%counted%as%being%dilutive.%

8!!Contingent!assets!and!liabilities!

%

IDEX%does%not%have%any%contingent%assets%or%contingent%liabilities.%IDEX%has%not%issued%any%guarantees.%

%

9!!Related!party!transactions!

%

In% 2014% IDEX% has% recorded% NOK% 2,298%

thousand% for% services% provided% from% IDEX’s%

legal% counsel,% law% firm% Ræder,% in% which%

chairman% Morten% Opstad% is% a% partner.% Mr.%

Opstad’s%work%beyond%board%duty%has%been%

invoiced% by% Ræder.% The% services% in% 2014%

include% legal% assistance% in% connection% with%

the%private%placements%of%shares%in%the%first%

quarter%and%in%particular%preparation%of%the%

listing% prospectus% in% connection% with% the%

private% placement% of% 60% million% shares% on%

29%January%2014.%

On% 24% February% 2014,% Ralph% W.% Bernstein,%

CTO,%exercised%1,672,960%subscription%rights%

and% acquired% the% corresponding% number% of%

shares% at% a%weighted% average% price% of% NOK%

1.14% per% share.% On% the% same% date,% Erling%

Svela,% then% CFO,% exercised% 66,668% subD

scription% rights% and% acquired% the% correD

sponding% number% of% shares% at% a% price% of%

NOK%1.20%per%share.%%

The%board%resolved%on%1%April%2014%to%grant%

1,500,000%incentive%subscription%rights%(SRs)%

to%Henrik%Knudtzon,%CFO%as%of%August%2014,%

at% an%exercise%price%of%NOK%7.03%per% share.%

The% board% resolved% on% 15% September% 2014%

to% grant% 1,500,000% SRs% to% Hemant% Mardia,%

CEO,% at% an% exercise% price% of% NOK% 4.45% per%

share.% The% grants% were% made% under% the%

company's% 2013% and% 2014% incentive% subD

scription% rights% plans% as% resolved% at% the%

annual% general% meetings% on% 16%May% 2013%

and%7%May%2014%respectively.%%

In% the% fourth% quarter% IDEX% entered% into% an%

addendum% to% the% continuing% service% agreeD

ment%with% Robert% N.% Keith%who% since% 2013%

has%assisted%IDEX%in%strategic%analysis%and%in%

dealing% with% larger,% international,% proD

spective% partners.% Under% the% addendum,%

Mr.% Keith% will% be% paid% NOK% 2.0% million% per%

year%for%his%services%in%2014D2016.%%

!

10!!Events!occurring!after!the!balance!sheet!date!

!

Between% 31% December% 2014% and% the% resoD

lution% of% these% condensed% consolidated%

interim%financial%statements,%there%have%not%

been% any% events% which% have% had% any%

noticeable% impact% on% IDEX’s% result% in% 2014%

or% the% value% of% the% company’s% assets% and%

liabilities%at%30%December%2014.%

The% exercise% amount% for% 500,000% shares% to%

Roger% Bauchspies,% which% were% resolved% on%

30%December%2014,%have%been%paid%and%the%

shares%were%issued%in%January%2015.%

The% board% resolved% on% 27% January% 2015% to%

issue% 237,500% shares% to% an% employee% who%

exercised% incentive% subscription% rights.% The%

weighted% average% exercise% price% per% share%

was%NOK%0.98.%The%shares%have%been%issued.%